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At Will EmploymentHR Best PracticesFeaturedDecember 13, 2011by Stanton LawHow Much Proof is Enough to Fire?

A likely story….

An HR director called me last week to ask whether it was okay to fire an employee whom she suspected of fraud.  Apparently, because of an accounting system error, the company had unknowingly been paying the employee her regular wages for three months while the employee was out on (supposedly) unpaid medical leave.  The company only discovered the error (and the overpayment) when the employee challenged the company’s insurance provider’s rejection of her disability insurance claim.

When confronted with the fact she had been accepting the mistaken payments and had misrepresented her income to the insurance company, the employee claimed that she was entirely unaware of the deposits being made into her checking account for the past six pay periods.   The HR director was justifiably suspicious that anyone could come into 12-weeks’ compensation without knowing it, but became even wearier when the employee said that she’d spent the money and could not reimburse the company.  From where did the employee think the money in her checking account was coming every couple weeks?  After a few more follow-up questions, the director concluded that the employee’s story was simply not adding up.

The director wanted to know if she had sufficient grounds to terminate the employee or whether she should keep investigating to confirm that the employee had knowingly defrauded the company.

The power of the at-will doctrine

This issue is similar to another one I’ve faced several times in which an employee arrives at work and appears intoxicated – his eyes are glassy and bloodshot, he’s unsteady and slurring his words, and he smells like a fraternity basement.  The frantic boss calls and asks if they should send the person to be tested for alcohol.

My question back to both the defrauded HR director and the employer with the drunk employee is the same – Why?  Why would you go through the time, expense, and hassle to try to confirm something that you already so strongly and so reasonably suspect?

As you’re likely aware, Georgia is a strong at-will state.  Under the at-will doctrine, employers are in most cases free to terminate an employee for a good reason, bad reason, or no reason at all, as long as it is not an illegal reason.  Firing an employee because you’re 92% sure they’re lying, 83% positive they’ve stolen from the company, or 68% confident they’re high is no less legal than jumping through all sorts of hoops to approach 100% certainty.  As long as you’re treating all similarly situated employees similarly and without regard to their protected characteristics, do you really need the confirmation that may come from a full-blown investigation of the circumstances?  Of course not.

In other words, since it is perfectly permissible to fire an employee for appearing to be under the influence, because an employer is suspicious that the employee defrauded the company, or based upon the reasonable good faith belief that there has been any policy violation, bulletproof evidence of the infraction is superfluous.

Make good business decisions

Just because you can do something, however, does not always mean you should, and certainly doesn’t mean that you have to.  It is a business decision, not a legal one, whether termination is warranted in a given situation, including for the employee who accepted (and spent) the unearned paychecks.  As with any adverse employment action, employers should consider all aspects of the decision, including the applicable employment law, and do what’s best for the company under the circumstances.